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Speaker 2: Now, let's get to today's.
Speaker 3: Second drop of some big bank earnings another round along
Speaker 3: with business updates from the Wall Street banks. We got
Speaker 3: today Morgan Stanley and Bank of America BAA shares we've
Speaker 3: seen them trade slightly lowered despite fourth quarter profit beat
Speaker 3: due to high investment banking fees and strong net interest income.
Speaker 3: And then Tim Morgan Stanley shares, we've seen them take
Speaker 3: off rallying, following in the steps of what we saw
Speaker 3: in terms of share moves by Goldwyn, JP, Morgan and City.
Speaker 3: They reported yesterday Morgan Stanley fourth quarter profit more than doubling,
Speaker 3: driven by strong trading revenue due to US election volatility.
Speaker 4: Here with the details on today's big bank results, we
Speaker 4: got Bloomberg Intelligence Senior Global Banks analyst Alison Williams here
Speaker 4: in the Bloomberg BusinessWeek Studio. Alison, Bank of America A
Speaker 4: little preview for the clothes right now is going to
Speaker 4: be one of my decliners today. Why are shares lower?
Speaker 5: I mean, you know that yesterday I think was when
Speaker 5: there was a readjustment in terms of, you know, we
Speaker 5: got the we got the results yesterday, we had strong numbers,
Speaker 5: and I think Bank of America did deliver, right, they
Speaker 5: delivered on that an interest income upside. The outlook is good,
Speaker 5: the outlook for costs is good. They're going to have
Speaker 5: operating leverage. But potentially wasn't the same magnitude.
Speaker 2: Is it because they were already up three percent yesterday?
Speaker 5: Yeah, I mean I think yeah. So I think yesterday
Speaker 5: was kind of baking in, you know, an adjustment for
Speaker 5: expectations like, okay, so we've seen this across the banks,
Speaker 5: We're probably going to get it from Bank of America.
Speaker 5: And as I said, they did deliver on it, but
Speaker 5: not necessarily. I mean, the huge upside that we're seeing
Speaker 5: at the capital markets focused Morgan Stanley and Golden Sachs
Speaker 5: for example, and so Bank of America good growth in
Speaker 5: their wealth management business, but we knew that they had
Speaker 5: already talked about that, so that was kind of in line.
Speaker 5: And then you know, trading and revenue, yes, up, but
Speaker 5: not of forty five percent, which is what we saw
Speaker 5: at you know, forty five percent trading growth in Morgan Stanley.
Speaker 3: Yeah, I mean it's the traders, right that seem to
Speaker 3: have really done super super well. I mean, even if
Speaker 3: investment banking fees are up, I mean they're coming from
Speaker 3: I mean, there's still not where they were when they
Speaker 3: were hitting record levels, right, and it's it was pretty anemic,
Speaker 3: like the reference point.
Speaker 5: But to your point, what people are really focused on
Speaker 5: is this investment banking fee recovery. Investors and managements and
Speaker 5: bankers have been looking for it, you know, ever since
Speaker 5: the downturn, and so now we're starting to see things
Speaker 5: pick up. We saw i mean IPOs in the fourth quarter.
Speaker 5: It's really was like a hockey stick. And so, you know,
Speaker 5: the highest level in a few years M and A
Speaker 5: backlog Morgan Stanley saying today it's like the highest and
Speaker 5: you know, ten to fifteen years. Keep in mind that
Speaker 5: M and A feeds into all these other underwriting businesses.
Speaker 5: So so that's something to be excited about.
Speaker 2: Right, you do a deal for a company, you do
Speaker 2: like other businesses.
Speaker 3: I mean, we just had at the start of our broadcast,
Speaker 3: Rio Tinto and Glencore said to discuss a potential combination, you.
Speaker 5: Know, right, and that is, you know, after Trump, we
Speaker 5: saw a sentiment really drive all these banks higher. Part
Speaker 5: of that is less scrutiny and anti trust and so
Speaker 5: that's meaningful, not not for banks merging with each other,
Speaker 5: but for banks advising.
Speaker 2: On more deals.
Speaker 5: And you know, we actually INBI we have a we
Speaker 5: did a deep study led by you know, my my
Speaker 5: colleague Neil Sipes, looking at M and A in the cycle.
Speaker 5: You know, it's a cyclical business, and you know it's
Speaker 5: you can make a really solid argument that we could.
Speaker 5: You know, M and I is a percent of market
Speaker 5: cap reached new lows last year, and you can make
Speaker 5: a caste for that improving just as we said, scrutiny,
Speaker 5: more sentiment as people feel a little bit more confident
Speaker 5: in the economy, you know, the pro growth economy as
Speaker 5: Jamie calls it. And really if you get that improved sentiment,
Speaker 5: you can start to see more and more deals get done.
Speaker 4: What do we learn in them about in the last
Speaker 4: thirty six hours about the way consumers are feeling about
Speaker 4: the economy specifically, you know, Bank of America. We often
Speaker 4: look too, because they have such a good view on
Speaker 4: consumers in the US.
Speaker 5: What did we hear, I mean, we heard good things.
Speaker 5: It's a little hard to tell because the fourth quarter
Speaker 5: is really bolstered by all that holiday spend.
Speaker 4: Yeah, I know, my credit card, I'm confirmed.
Speaker 6: That is confirmed, confirmed.
Speaker 5: And that's why in the first half tends to be
Speaker 5: the weaker part on the credit side, right because people
Speaker 5: are ringing up the bills. There's spending is very strong,
Speaker 5: but then the bills start coming in and so you know,
Speaker 5: the credit trends in that business are not great for
Speaker 5: the first half, but you know, in general, the credit
Speaker 5: picture is good. You know, we haven't talked about credit.
Speaker 5: You didn't see a lot of headlines. That means that
Speaker 5: the stories, good provisions actually coming on a little bit
Speaker 5: better than expected. When we look at reserves, so keep
Speaker 5: in mind, reserves are thinking about the losses ahead, they're
Speaker 5: over the life, but they're also based on you know,
Speaker 5: economic scenarios, capabilities of those economic scenarios, and they're all
Speaker 5: telling us that, you know, next year looks stable and solid.
Speaker 3: What does the you know, kind of financial community, investor
Speaker 3: analyst community, you guys think when it comes to those
Speaker 3: capital ratios. I know there's expectations under Trump that even
Speaker 3: that eases, right, or it doesn't even it doesn't get
Speaker 3: amped up more.
Speaker 2: And so that's why we saw that Trump bump with
Speaker 2: a lot.
Speaker 3: Of these banking names in the last quarter of twenty
Speaker 3: twenty four. What's the view on that in terms of
Speaker 3: oversight and keeping them in check?
Speaker 5: So the viewposts Trump to your point, right, banks shares rally,
Speaker 5: they're very excited, and it's not necessarily regulation.
Speaker 2: Roll back, but let's rules.
Speaker 5: So the rule you're referring to is a new rule
Speaker 5: and it's more punitive for the biggest, biggest banks. So again,
Speaker 5: these capital markets focus banks, so less regulation, more revenue.
Speaker 5: We saw a twenty billion dollar buy back announced by
Speaker 5: City Group, fourteen percent of their market cap. Right, you
Speaker 5: saw you saw those shares rally. But that is another
Speaker 5: thing that investors are focused on because the banks happen
Speaker 5: hoarding capital, if you will, right, because they these when
Speaker 5: the rules were introduced, they were extremely I don't know
Speaker 5: if you want to say strict or punitive, but you
Speaker 5: know there we're going to need a lot of capital.
Speaker 5: As people started to feel that, okay, these are going
Speaker 5: to get watered down. There was you know, comment by
Speaker 5: Power that they're going to get watered down. So people
Speaker 5: felt a little bit better. But really that you know,
Speaker 5: post Trump, people became very excited. And now with Bars
Speaker 5: stepping down, you know, Bar was really one of the
Speaker 5: people that was looking for these banks to hold more capital.
Speaker 5: And so I think all of that positive momentum. Investors
Speaker 5: are more positive. But managements are also feeling better about Okay,
Speaker 5: you know, we may have we may feel better about
Speaker 5: the capital situation.
Speaker 4: That said a headline coming in you mentioned City City
Speaker 4: eliminating more jobs. This week, the bank games to reduce
Speaker 4: jobs by twenty thousand by the end of twenty twenty six,
Speaker 4: headcount currently two hundred and twenty nine thousand. How should
Speaker 4: we read into this? The story just breaking about ten.
Speaker 5: Minutes, So, I mean City Group and Walls Fargo are
Speaker 5: a little bit unique because they are dealing with some
Speaker 5: regulatory issues, right, So there's a couple of and there's
Speaker 5: a couple of things at City First they called the transformation, right.
Speaker 2: So just kind of about twenty seconds getting that in control.
Speaker 5: But then they are also refining their business and honing
Speaker 5: their business, right, and so focusing on the parts that
Speaker 5: are more profitable.
Speaker 2: We saw the severance charges at Wells.
Speaker 5: It's not surprising that we were kind of seeing continued
Speaker 5: honing the business at the City Group.
Speaker 3: All right, Yeah, they continue in terms of that transformation,
Speaker 3: all right, and City shares a little change in today's session.
Speaker 3: Alison Williams, thank you so much. Luck going on when
Speaker 3: it comes to the big banks. Senior at Global Bank
Speaker 3: Salist Here at Bloomberg Intelligence.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 7: Well.
Speaker 3: The data are clear that the nation's current housing crisis
Speaker 3: stems from a lack of home building in the wake
Speaker 3: of the Great Recession more than a decade ago. Earlier
Speaker 3: this month, Bloomberg Opinion highlighting in a column how home
Speaker 3: construction never caught back up to the demand of a
Speaker 3: growing population. As a result, the United States has a
Speaker 3: shortage of about four and a half million homes. This
Speaker 3: is from Zillo data. Surveys published last year. Tim showed
Speaker 3: that more than half of all prospective home buyers were
Speaker 3: unable to make a move.
Speaker 4: Larry Connor is founder and managing partner of the Connor Group.
Speaker 4: It's a real estate investment firm that owns and operates
Speaker 4: luxury apartments and high growth markets throughout the South and
Speaker 4: the Midwest. The firm has more than five billion dollars
Speaker 4: dollars in assets under management. Larry joins us from Dayton, Ohio. Larry,
Speaker 4: good to have you with us. Just give us an
Speaker 4: idea of your footprint and when we say luxury, what
Speaker 4: sort of the demographic that your firm caters to.
Speaker 8: Sure? First off, thanks for having me.
Speaker 9: Yeah, we operated eighteen cities around the country. We go
Speaker 9: as far west as Phoenix, Denver, Texas, Florida, North Carolina,
Speaker 9: and obviously here.
Speaker 8: In the Midwest.
Speaker 9: And so generally it's going to be the renner by choice.
Speaker 9: But I would tell you the affordable housing crisis is real. Two,
Speaker 9: it's just not for example, on the coast, I think
Speaker 9: it's in every city across to America. But I believe
Speaker 9: the new administration absolutely has an opportunity to address this well.
Speaker 3: And I'm curious, well, how do you think that they
Speaker 3: should address it? Because I think some might say and
Speaker 3: I'm not being sassy here, so forgive me, but I
Speaker 3: know I'm going to get emails. You know, they would say, hey, Larry,
Speaker 3: you know what can a luxury real estate investor kind
Speaker 3: of really tell us about what needs to be done
Speaker 3: when it comes to affordable housing? So let's start there now.
Speaker 9: I think that's a fair question, Carol. So I would
Speaker 9: have three thoughts. And by the way, the backdrop is
Speaker 9: the new administration has the opportunity to unleash the power
Speaker 9: of America's free enterprise. The problem is the economics.
Speaker 8: Don't work for these developers.
Speaker 9: And I know a lot of developers who work with
Speaker 9: even though we don't develop properties, and say, okay, how
Speaker 9: so three ways. Number one, common sense regulations. Let me
Speaker 9: give you just one example. In California.
Speaker 8: There was a.
Speaker 9: Recent research paper approximately thirty percent of the total cost
Speaker 9: of a new home in California is based upon permitting
Speaker 9: and red tape.
Speaker 8: That's not good, Okay.
Speaker 4: Yeah, that's an issue that has been talked a lot
Speaker 4: about too in the wake of the fires, and even
Speaker 4: the governor suspending some of that red tape to try
Speaker 4: to get this stuff rebuilt faster. Go ahead, Sorry, I
Speaker 4: just want to jump in.
Speaker 9: Yeah, Jim, You're absolutely right, and in California the same
Speaker 9: research it takes up to four years. Seven three pronged attack.
Speaker 9: Number One, common sense regulations. I think the Trump and administrations.
Speaker 8: Will equipped to do that.
Speaker 9: Second, create low interest costs moans, Third tax credits. But
Speaker 9: in return, put real teeth in the requirements that these developers.
Speaker 9: One build a quality product and two, over the long term,
Speaker 9: maintain it to high standards.
Speaker 4: So there, I hear what you're saying, and I think
Speaker 4: a lot of people watching and listening would agree that
Speaker 4: regulations are a huge issue. The challenge, though, is the
Speaker 4: federal government doesn't really have much control on the regulatory
Speaker 4: front when it comes to zoning rules, when it comes
Speaker 4: to environmental policy rules, environmental review rules in individual states.
Speaker 4: How do you make it work at a federal level
Speaker 4: if these are local issues?
Speaker 8: Yeah, fair statement, Tim.
Speaker 9: The reality is it's a federal problem, it's a state problem,
Speaker 9: and it's a local problem. But somebody has to start
Speaker 9: in the federal government, and the new administration, in my opinion, are.
Speaker 8: Uniquely positioned to do so.
Speaker 9: For example, let's go to the low interest rate instead
Speaker 9: of borrowing costs for these developers at seven or eight
Speaker 9: percent create an environment where they can do it at
Speaker 9: three or four percent. Now suddenly the economics work and
Speaker 9: developers will develop tax credits. Every deal project you do,
Speaker 9: you need a down payment, tax credits can help fund them.
Speaker 8: If you do that, developers will do it.
Speaker 9: But again, you've got to build a safety and out
Speaker 9: of regulations.
Speaker 3: Larry, why do developers always need tax breaks? I mean,
Speaker 3: you're not going to build an areas where you're not
Speaker 3: going to be able to sell properties, right, You're not
Speaker 3: going to do that because it would be a bad
Speaker 3: business decision. So I'm not sure I ever completely get this.
Speaker 3: I mean I think, why don't we give tax breaks
Speaker 3: to the homeowners that actually buy it and send them
Speaker 3: to do it even more and to kind of make
Speaker 3: it even possible. We know that when you know a
Speaker 3: homeowner buys a home, you know they're going to buy
Speaker 3: a lot of other things. There's a lot of economic
Speaker 3: activity that is rest that is created as a result.
Speaker 8: Good question, Carol.
Speaker 9: Two part answer or number one is I agree, give
Speaker 9: the home owner some tax breaks.
Speaker 8: Here's why tax credits.
Speaker 9: So you're going to build a project in wherever in
Speaker 9: Ohio and Cincinnati, Ohio.
Speaker 8: Well, if you get a loan.
Speaker 9: Let's say through Fannie Mae freddie Man that loan is
Speaker 9: only under cover let's call it seventy five percent of
Speaker 9: your cost.
Speaker 8: Well, you have to come up with.
Speaker 9: A twenty five percent down payment. A lot of developers
Speaker 9: can't come up with that. Tax credits you can actually monetize.
Speaker 8: You can go out and sell.
Speaker 9: Those to investors who will buy those net net you
Speaker 9: can pay for maybe not all, but maybe half to
Speaker 9: two thirds.
Speaker 8: Of your down payment.
Speaker 9: That's why, again, you come back to the realities. You
Speaker 9: got to make the economics work. If you do, you're
Speaker 9: going to unleash the power of all these developers.
Speaker 3: So only got about a minute and a half for
Speaker 3: so left thirty seconds. I want to ask you, though,
Speaker 3: if you could change one thing that you think would
Speaker 3: really create affordable housing, and it's not just affordable housing,
Speaker 3: but affordable housing in major cities like New York and
Speaker 3: LA where it's expensive and they're needed in those locations,
Speaker 3: not just anywhere where people who maybe don't make a
Speaker 3: lot of money, but they work in New York City
Speaker 3: and they need a place to live. One change, thirty seconds,
Speaker 3: what would it.
Speaker 9: Be, reduce the cost and create the economics for it
Speaker 9: to work.
Speaker 4: Larry, I like that answer because it was short and
Speaker 4: it gives me time to ask about your mission to
Speaker 4: space back in twenty twenty two. With the one minute
Speaker 4: we do have left. Well, give us your outlook on
Speaker 4: NASA under the next administration and the role of private investors,
Speaker 4: and the role of private companies such as SpaceX Axiom,
Speaker 4: the company you went with to space to the ISS.
Speaker 4: What's your view over the next four years when it
Speaker 4: comes to the US role in the Cosmos.
Speaker 9: Well, if you ask my opinion, the future is space
Speaker 9: and it's important that the United States lead in control space. Second,
Speaker 9: I think again, you partner the private sector with the
Speaker 9: public sector, and the power of being.
Speaker 8: Able to do that can be unbelievable.
Speaker 9: Me personally, I was fortunate seventeen days in space extraordinary. Well,
Speaker 9: what's not known is that ten months of full trying
Speaker 9: training behind the scenes.
Speaker 8: We are not space tours.
Speaker 9: We were private astronauts who had to meet or exceed
Speaker 9: most of them NASA astronaut requirements.
Speaker 3: All Right, we got to leave it on that note, Lard.
Speaker 3: Great to get some time with you. Larry Connor, founder
Speaker 3: imaging partner of the Connor Group.
Speaker 1: This is The Bloomberg Business Week podcast. Listen live each
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Speaker 1: Say Alexa Play Bloomberg eleven thirty Well.
Speaker 4: Treasury Secretary nominee Scott Bessen warned that the US space
Speaker 4: is an economic crisis that will hammer middle in working
Speaker 4: class people if the twenty seventeen Republican tax cuts are
Speaker 4: not extended when a swath of them expire at the
Speaker 4: end of this year. Bessent making these comments answering questions
Speaker 4: at his Senate Finance Committee confirmation hearing today. He also
Speaker 4: touched on the independence of the FED during that hearing.
Speaker 3: I'm asking you, but let me just say, but you
Speaker 3: don't deviate from our conversation that you think that there
Speaker 3: should be independence.
Speaker 10: I think on monetary policy decisions, the FOMC should be independent.
Speaker 9: Thank you.
Speaker 6: I appreciate that.
Speaker 4: Indeed, here at Bloomberg, we've been talking a lot about
Speaker 4: Scott Besson in recent months, Yet for many people he
Speaker 4: wasn't a familiar name, especially those in Republican political circles
Speaker 4: before Donald Trump nominated him to be Treasury Secretary. Still
Speaker 4: is Bloomberg Business Wee columnist Josh Green, Right, it's the
Speaker 4: macro hedge fund executive beat out several rival contenders to
Speaker 4: get the nod for one of the most powerful jobs
Speaker 4: in global economics and finance. He managed to convince both
Speaker 4: Maga populist and Wall Street that he was on their side.
Speaker 4: Josh Green is a Bloomberg BusinessWeek national correspondent. He's also
Speaker 4: the author of several books, including the number one New
Speaker 4: York Times bestseller Devil's Bargain, Steve bann and Donald Trump
Speaker 4: and the Storming of the Presidency, as well as The
Speaker 4: Rebels Elizabeth Warren, Bernie Sanders, AOC and The Rise of
Speaker 4: the New Left. Josh joins us from Washington, d C. Josh,
Speaker 4: I had no idea Steve Bannon was such an integral
Speaker 4: part of Scott Besson's sort of rise in Republican Circles.
Speaker 4: Explain the relationship there and what Besson did during the
Speaker 4: first Trump presidency and then over the last four years.
Speaker 10: Yeah, Steve Besson is. Sorry, Steve Bannon is. He's kind
Speaker 10: of like a Maga Forrest Gump. He just sort of
Speaker 10: shows up and everywhere and everybody. But as I wrote
Speaker 10: in Bloomberg News this week, with my colleague Soleia Mosen,
Speaker 10: we did a big profile of Scott Bessont, the likely
Speaker 10: next next Treasury secretary, basically trying to answer the question
Speaker 10: like who is this guy and where did he come from?
Speaker 10: I was watching an event at mar a Lago earlier
Speaker 10: this month, and Trump on stage kind of just stood up.
Speaker 10: There was like musing to the crowd like, Hey, there's
Speaker 10: Scott Besson Who's ever heard of this guy? And it
Speaker 10: sort of struck me as like that that really is
Speaker 10: a question to answer about Besstt, And of course this
Speaker 10: is what senators are trying to find out. We're trying
Speaker 10: to find out the hearings this morning, Bannon came into
Speaker 10: the picture because Bessentt, for most of his career had
Speaker 10: been a low profile but very well regarded hedge fund
Speaker 10: manager for George Soros's fund. In twenty fifteen twenty sixteen,
Speaker 10: he launched out on his own. A Key Square Group
Speaker 10: was his hedge fund, and shortly after Trump's inauguration in
Speaker 10: twenty seventeen. Bessen is a macroad bester, which is very
Speaker 10: curious to learn about these new forces of populism that
Speaker 10: are obviously royaling governments and markets across the world, and
Speaker 10: wound up paying to attend to Credit Lionee conference in
Speaker 10: Hong Kong, where he sat next to Steve Bannon, who
Speaker 10: had recently left the White House, and from what Bannon describes,
Speaker 10: they basically had a two day debrief on all things
Speaker 10: Trump and have been in touch ever since. And when
Speaker 10: Besson made up his mind that he wanted to have
Speaker 10: a position in the Trump administration, Bannon was one of
Speaker 10: the people in his ear helping advise him how to
Speaker 10: land the Treasury secretary role.
Speaker 2: You know, I think about this, Josh.
Speaker 3: There are a lot of politicians out there, individuals who
Speaker 3: kind of start to align themselves or start to play
Speaker 3: to Donald Trump. But what was it what's so unique
Speaker 3: about what Besson did that really made him such a
Speaker 3: standout to ultimately get one of the top jobs, or
Speaker 3: at least nominated for one of the top jobs in
Speaker 3: this administration upcoming administration.
Speaker 10: You know what stood out to me about him, and
Speaker 10: I think Sileia, my co author, also was that what
Speaker 10: you've tended to see across two Trump administrations is that, uh,
Speaker 10: the key figures tend to either come from the traditional
Speaker 10: world of Wall Street or GOP politics, or they come
Speaker 10: from the kind of hard right Steve Bannon Maga Breitbart
Speaker 10: News world. And what was so interesting about Bessett is
Speaker 10: that he he emerged out of the Wall Street world,
Speaker 10: but over the last seven or eight years, he's really
Speaker 10: become a sort of a prominent and well thought of
Speaker 10: person in the MAGA world. Also, Bannon was one of
Speaker 10: his most vocal and outs outspoken supporters during the long
Speaker 10: race to become Treasury Treasury Secretary.
Speaker 6: And I think it was the.
Speaker 10: Fact that Bessant has went managed to win over kind
Speaker 10: of the two key components of Trump era Republican Party
Speaker 10: that explain how a guy like this, who doesn't have
Speaker 10: the profile of like, you know, a Gary Cohne or
Speaker 10: some you know, some of the more famous Treasury secretaries
Speaker 10: of the past, wound up up getting this role.
Speaker 4: I love this part at the top of the piece
Speaker 4: where you quote Steve benn who says he went to
Speaker 4: Ivy League and has an elite Wall Street pet pedigree,
Speaker 4: but he's a true populist. He's MAGA to his core.
Speaker 4: And then you also quote just after that Stanley Druckenmiller,
Speaker 4: who says Scott has very conservative views, but they are
Speaker 4: not necessarily orthodox or populist.
Speaker 6: So what is it to me?
Speaker 10: I just said, there's a great way of framing the
Speaker 10: kind of chameleon nature of Scott Bessont's political appeal, the
Speaker 10: fact that he has, you know, the talents and I
Speaker 10: think the credibility to appeal to a guy like Bannon,
Speaker 10: while at the same time, you know, having loyalists like
Speaker 10: like Stan Druckenmiller, who's about is credential the Wall Street
Speaker 10: figure is you're liable to find now. I think the
Speaker 10: challenge for besst is going to be that, you know,
Speaker 10: once he's confirmed, I think the expectation is he'll be
Speaker 10: confirmed fairly easily and becomes Treasury secretary.
Speaker 6: You can't be a friend to all people.
Speaker 10: You have to sort of choose sides, and ultimately you
Speaker 10: have to do the president's bidding. And so he is
Speaker 10: going to have some I think, very difficult situations in
Speaker 10: the coming years and months where, uh, you know, one
Speaker 10: group is going to want one thing and another group's
Speaker 10: going to want another. You know, if Trump wants to
Speaker 10: slap on global tariffs, that's going to make a lot
Speaker 10: of Wall Street folks very nervous. You know, if if
Speaker 10: Besson wants to focus on tax cuts and not do
Speaker 10: any of the tariff or the MAGA stuff, that's going
Speaker 10: to make people like Steve Bannon upset and so as
Speaker 10: I you know, as we write in the piece, Besson
Speaker 10: has a very narrow, tight rope to walk, and it's
Speaker 10: going to be interesting to see, you know, if he
Speaker 10: is able, he is a newcomer to high level politics,
Speaker 10: is able to pull this off well.
Speaker 3: And you know, I think about in moments of crisis,
Speaker 3: whether it's the Great Financial Crisis or you know, even
Speaker 3: the pandemic, you know, you need a Treasury secretary who
Speaker 3: really figures out what really needs to be done to
Speaker 3: kind of get us out of a financial crisis. Is
Speaker 3: this someone who would stand up to Donald Trump? Should
Speaker 3: he need to be in terms of policy initiatives.
Speaker 10: You know, it's a good it's a good question, and
Speaker 10: it is the question that everybody wants to know in
Speaker 10: Washington on Wall Street. In my like lame cop out
Speaker 10: answer to you, we don't know yet. That's one of
Speaker 10: the big questions around Scott and frankly everybody in Trump's
Speaker 10: inner circle standing up to Trump is difficult. As a
Speaker 10: senior Administration official was telling me when I asked him
Speaker 10: this question for the piece, he said, you don't stand
Speaker 10: up to Trump.
Speaker 6: You don't engineer a confrontation.
Speaker 10: What you have to do is manage his impulses and
Speaker 10: help translate what he wants to do into into policies
Speaker 10: and language that isn't going to spook global capital markets.
Speaker 10: And I do think that because Scott Bessett has such
Speaker 10: deep market experience. This isn't a guy who's been holed
Speaker 10: up in the academy thinking about theory. He's been out
Speaker 10: there running a fairly successful hedge fund. I do think
Speaker 10: that that is a skill set that he possesses. Now,
Speaker 10: whether whether or not he can convince Trump to walk
Speaker 10: a straight and narrow path, well.
Speaker 6: I would I would say I don't think.
Speaker 10: I don't think anybody is able to kind of quite
Speaker 10: do that all the time. But I do know that
Speaker 10: there's a great deal of relief on Wall Street and
Speaker 10: Republican circles and even quietly in Democratic circles that Besent
Speaker 10: is the is the man going to habit this role
Speaker 10: rather than some of the other choices who I don't
Speaker 10: think had that level of experience and that degree of
Speaker 10: trust that they know what they're doing when it comes
Speaker 10: to managing the levers of the economy.
Speaker 4: Can he be a servant to two different sides? Can
Speaker 4: he be a servant to Wall Street and to Maga
Speaker 4: as well? Can he pull that off?
Speaker 10: I don't think you can, because on a lot of issues,
Speaker 10: including issues that are going to be central to what
Speaker 10: a Treasury secretary does, the two campser shrip diametrically opposed.
Speaker 6: Right, Wall Street doesn't want.
Speaker 10: Tariffs, the Maga Crow does, and so you know, we've
Speaker 10: gotten a preview of how he might try and manage
Speaker 10: that best, and actually showed up at a Bloomberg's DC
Speaker 10: office last summer and sat down for a long and
Speaker 10: interesting editorial talk with me and some of my colleagues.
Speaker 10: You know, one of the proposals he'd mentioned about how
Speaker 10: you kind of split the baby was, well, maybe you
Speaker 10: could have a friends and family plan for tariffs. Our
Speaker 10: allies would get lower rates and adversaries would get higher rates.
Speaker 10: So you could already see kind of the gears turning
Speaker 10: in his mind of how can I carry out Trump's
Speaker 10: policies in a way that reflect what he wants without
Speaker 10: upsetting markets to a degree that it causes a recession,
Speaker 10: a return of inflation, and so on. And so that's
Speaker 10: why I think he's going to be one of the
Speaker 10: most interesting.
Speaker 6: Figures to watch in the upcoming Trump administration.
Speaker 3: Well, it's a fascinating story to read. Josh Green, Thank
Speaker 3: you so much, Bloomberg BusinessWeek National correspondent.
Speaker 2: This is Business Week.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 1: or watch US Live on YouTube.
Speaker 4: The numbers out of LA just absolutely astounding. The flames
Speaker 4: have killed at least twenty five people does and still
Speaker 4: remain unaccounted for. They've upended life in America's second largest city,
Speaker 4: carol with more than three hundred thousand Los Angeles County
Speaker 4: homes and businesses still without power, many schools either destroyed
Speaker 4: or badly damaged.
Speaker 3: All right for more, we turn out in one of
Speaker 3: the nation's most respected voices on climate change, the environment
Speaker 3: in public health. Jim McCarthy is former USPA administrator and
Speaker 3: first White House National Climate Advisor. She's also managing co
Speaker 3: Chair of America is All in Coalition. It's a group
Speaker 3: of leaders from all over the United States that supports
Speaker 3: climate action. She's also operating advisor at Pegasus Capital Advisors
Speaker 3: and a senior advisor at tpg Rise Climate Fund, and
Speaker 3: a senior advisor at Bloomberg Philanthropy is the philanthropic arm
Speaker 3: of Bloomberg LP, which is of course the parent company
Speaker 3: of Bloomberg TV and Bloomberg Radio. She is a busy individual,
Speaker 3: but it's her expertise in terms of climate that everybody
Speaker 3: is drawing upon.
Speaker 2: She joins us from Boston and we do as well. Gina,
Speaker 2: Nice to be talking with you.
Speaker 3: The last time was at our Bloomberg Green event last
Speaker 3: year last fall. We do want to start with the
Speaker 3: La fires. We are still waiting to see what the
Speaker 3: cause was, but yet many would argue that climate change
Speaker 3: exacerbated the situation no rain for eight or nine months.
Speaker 3: How are you thinking about La and what has happened there?
Speaker 7: Well, first of all, it's great to be back on
Speaker 7: the show, and my heart does go out to everybody
Speaker 7: in this area. It's really feels like I'm watching climate
Speaker 7: change a crisis in action. When I'm looking at what's
Speaker 7: happening in the devastation. Look, twenty twenty four was the
Speaker 7: warmest year on record globally, and what we saw in
Speaker 7: California was extreme heat and the lack of rain. We
Speaker 7: saw one hundred mile per hour wins and that just
Speaker 7: led to a recipe for disaster. And I think we
Speaker 7: have to be prepared. We have to understand how we
Speaker 7: can be more resilient, how we can adapt and look
Speaker 7: at some opportunities. We have to really begin to tackle
Speaker 7: these issues and stop the climate denial that keeps holding
Speaker 7: people back. You know, these extreme weather events cost American
Speaker 7: families more than one hundred and fifty billion dollars every year.
Speaker 7: Isn't it time for us to really recognize this and
Speaker 7: take action?
Speaker 4: Administrator, you said we have to be prepared. Was Los
Speaker 4: Angeles not sufficiently prepared for this latest round of wildfires?
Speaker 7: No, that wasn't what I was suggesting. I mean, it
Speaker 7: was a confluence of the issues that actually led to
Speaker 7: this challenge. But my point is that we have to
Speaker 7: moving forward, understand that with the advent of climate change
Speaker 7: and with the challenges that we are facing, we have
Speaker 7: to understand that a shift to clean energy is essential.
Speaker 7: Reduction in our need for fossil fuels is essential because
Speaker 7: we cannot allow this to continue to exacerbate. This is
Speaker 7: just the start of this problem. This is not yet answered,
Speaker 7: and it's time for us to develop a strategy in
Speaker 7: the United States to work with other countries to really
Speaker 7: start focusing on this clean energy zoom that we need
Speaker 7: to advance.
Speaker 3: Well, you know, the incoming president, Donald Trump, of course,
Speaker 3: being sworn in on Monday, has talked about more drilling
Speaker 3: in terms of fossil fuels and certainly seems to be
Speaker 3: a much more sympathetic sympathetic ear in terms of the
Speaker 3: fossil fuel industry. Having said that time will tell in
Speaker 3: terms of whatever policies we see. But any increase in
Speaker 3: reliance on fossil fuels, that's a problem in your view,
Speaker 3: I'm asking with a question mark.
Speaker 7: It's inconsistent with what we know we need to do
Speaker 7: to address climate change and keep people healthy. That's the
Speaker 7: major challenge here. And so the good news is that
Speaker 7: we have the answers here. You know, clean energy is
Speaker 7: literally booming. We now have federal investments that are really
Speaker 7: changing the game here. We have the BIPOD it's an
Speaker 7: infrastructure of the inflation Reduction Act. All that means that
Speaker 7: we now have more than four hundred thousand new clean
Speaker 7: energy jobs that have already grown just in the past
Speaker 7: two years. We have seven hundred and fifty one new
Speaker 7: clean energy projects out there. We're talking about money and
Speaker 7: jobs and rural communities, we're talking about the low income communities,
Speaker 7: and this is our opportunity. This is how we're going
Speaker 7: to prevent the continued devastation that we're seeing and begin
Speaker 7: to realize that clean energy is our answer and it
Speaker 7: is cheaper for families. I mean, we are talking about
Speaker 7: great news here on clean energy investments because it is
Speaker 7: lowering costs, but it's also opening the door a whole
Speaker 7: lot more energy choices like solar, which is thirty three
Speaker 7: percent cheaper than gas power that translates into a ninety
Speaker 7: five percent reduction in utility costs. This is a big
Speaker 7: deal and it is an opportunity.
Speaker 3: But we still not But Gina, you know, we rely
Speaker 3: still so much on fossil fuels at this point, right
Speaker 3: And many would argue, even green energy folks will say,
Speaker 3: you know, we still kind of need a hybrid approach
Speaker 3: in terms of energy because everything on the alt side,
Speaker 3: whether it's increasingly people are pointing to things like nuclear
Speaker 3: or geothermal, but even solar and wind it can't meet
Speaker 3: the demand that is out there today, and that we
Speaker 3: still need to rely on fossil fuels.
Speaker 2: Unfortunately, some might say for a few.
Speaker 7: More years, how to the challenge that we saw. You're
Speaker 7: absolutely right. I am not suggesting that we reduce our
Speaker 7: energy demand our energy in a way that's going to
Speaker 7: impact families. We need to address our energy challenges, but
Speaker 7: we don't. We can do that over time by increasing
Speaker 7: clean energy and watching fossil fuels be higher price, which
Speaker 7: they already are now and phase out. So this is
Speaker 7: not in all enoughing, nor is this an opportunity to
Speaker 7: threaten people's lives. We have to keep energy out there
Speaker 7: and moving and strong. But we can do that in
Speaker 7: a way that saves families money. We can do that
Speaker 7: in a way that lowers our air pollution challenges. We
Speaker 7: can do it in a collaborative way internationally so that
Speaker 7: we meet our responsibility to other countries as well. And
Speaker 7: so I'm excited about the opportunities now. I am not
Speaker 7: looking to shut the spick it off of fossil fuel tomorrow.
Speaker 7: I am looking at this as an opportunity to ensure
Speaker 7: that clean energy can progress because it is the winner.
Speaker 7: It's the winner for our families, it's the winner for
Speaker 7: our pocketbooks, and it is certainly a winner in terms
Speaker 7: of the health and safety of our country and how
Speaker 7: to move forward. Do you think it so we just
Speaker 7: have to continue to be leaders on this.
Speaker 4: Do you think we can continue to be leaders on
Speaker 4: it during the next Trump administration given the way that
Speaker 4: the President elect has been outspoken about his disdain for
Speaker 4: renewable energy and his support of the fossil fuel industry.
Speaker 7: You know, I think it's going to be very challenging.
Speaker 7: It was very challenging during the Trump administration. But one
Speaker 7: of the reasons I've been working with Bloomberg Philanthropies, as
Speaker 7: you indicated, is that we're working on a program called
Speaker 7: America Is All In. It's an unbelievable opportunity for governors
Speaker 7: and mayors, local community leaders to work together to fill
Speaker 7: in the blanks when the new administration might want to waiver. Look,
Speaker 7: most of the money and the IRA the Inflation Reduction
Speaker 7: Act is actually going to Republican districts. You can see it.
Speaker 7: That's when most of the projects are being built.
Speaker 8: So they would have to.
Speaker 7: Be sort of challenged to not realize that we have
Speaker 7: to move this forward. And it's just as important in
Speaker 7: Republican districts, if not more so than ENDEMA.
Speaker 3: So, you know, one thing I want to ask you.
Speaker 3: You're a senior advisor at tpg Rise Climate Fund, operating
Speaker 3: advisor at Pegas's Capital Advisors. You know, we have spent
Speaker 3: so much time I feel like over the last decade
Speaker 3: even talking about the intersection of you know, money from
Speaker 3: you know, financial markets, capital markets, the private sector, working
Speaker 3: with the public sector. What are you hearing from you know,
Speaker 3: your experiences and working with those folks who manage a
Speaker 3: ton of money and can put it to work and
Speaker 3: make things move in the green space. We understand there
Speaker 3: are commitments and then there are really strong initiatives that
Speaker 3: move the needle. And especially under Trump administration, where I
Speaker 3: think many would argue too that they don't necessarily want
Speaker 3: to make the incoming president look at them negatively and
Speaker 3: get negative attention.
Speaker 2: So I don't know what's your.
Speaker 3: Hope for the next couple of years and that intersection
Speaker 3: I think of money that moves things.
Speaker 7: Yeah, I think you're going to see continued investment in
Speaker 7: the private sector. No, they may not be standing up
Speaker 7: and saying, you know, I'm doing this or that, but
Speaker 7: there's no question about it that we are not seeing
Speaker 7: private sector investment or public sector money waning. It is
Speaker 7: actually an opportunity of our lifetime. And I think that,
Speaker 7: you know, even if President Trump doesn't want to admit it,
Speaker 7: we are highly dependent now on clean energy. We have
Speaker 7: to be. We can not go back. We don't have
Speaker 7: that as a choice. And the exciting thing is we
Speaker 7: don't have to, you know. So right now, we know
Speaker 7: that Republican districts are heavily invested in this, as are
Speaker 7: the Democrats. We know, we have governors, We know we
Speaker 7: have leaders in cities and communities that are going to
Speaker 7: keep pushing forward. So this is all about the entire
Speaker 7: United States of America recognizing that we're facing a world's
Speaker 7: challenge that we not only helped to instigate, but can
Speaker 7: actually become leaders and moving forward. And the companies that
Speaker 7: I'm working with are all in on making that shift
Speaker 7: to clean energy and recognizing that that's we We're going
Speaker 7: to actually make the most benefit for our communities today
Speaker 7: and build a stronger America tomorrow.
Speaker 4: Administrator thirty seconds left President act Donald Trump's pick to
Speaker 4: lead the EPA, Lee Zelden. He did tell a Center
Speaker 4: panel that he believes that climate change is real. What
Speaker 4: are your thoughts on him as the pick? Thirty seconds?
Speaker 7: Well, that was better than the answers I've seen from
Speaker 7: the people. Look, Lee Leezelden is a bit of an unknown.
Speaker 7: I know that he has made some decisions in New
Speaker 7: York that seem to be very good ones from both
Speaker 7: an environmental and climate perspective. But I've also seen him
Speaker 7: do work that seemed very negative around around climate change
Speaker 7: and making progress. So we'll have to wait and see.
Speaker 7: You know, it's very easy to go in front of
Speaker 7: a committee and answer questions on now it apparently avoids
Speaker 7: most of them. But we have to work together. We
Speaker 7: have to understand about people, not politics.
Speaker 3: Well, we so appreciate getting time with you again. Jeana McCarthy,
Speaker 3: former US EPA administrator, first White House National also White
Speaker 3: Climate Advisor, I sh'd say, and she's also an advisor
Speaker 3: senior advisor Eplenbergh Philanthropy.
Speaker 10: Now about you let me drive them.
Speaker 4: Oh no, no, no, no, this is not a toy.
Speaker 8: He's going to drive any Please gravels. Let's wait, I
Speaker 8: want to drive. It's a good question. This is the
Speaker 8: drive to the clothes.
Speaker 6: Now plunks to music, Well, Briar Jona.
Speaker 8: Don on Bloomberg Radio.
Speaker 3: All right, everybody, we are just about eighteen minutes, nineteen
Speaker 3: minutes away from the closing bell on this Thursday, January sixteenth,
Speaker 3: Carol Master, Tim Stanovik liven Or Bloomberg Interactive Broker Studio.
Speaker 3: You're Bill Maloney and Charlie breaking down the trade here.
Speaker 3: We are definitely off our highs of this session. I'm
Speaker 3: looking at the S and P five hundred, still about
Speaker 3: almost four hundred names. Tim to the upside, but again
Speaker 3: it's kind of I feel like an anemic trade a
Speaker 3: little bit here.
Speaker 4: Okay, you mentioned earlier what's going on with yields. Earlier
Speaker 4: this week, Carroll, the yield on the tenure had to
Speaker 4: high a four point eight percent. It's the highest going
Speaker 4: back to November of twenty twenty three. It's backed off
Speaker 4: a bit. Our next guest, though, says, not so fast,
Speaker 4: and we're going to see five percent this year.
Speaker 3: All right, So let's see what Max Wasserman has to say.
Speaker 3: He is, of course, founder and senior portfolio manager at
Speaker 3: Miramar Capital, registered investment advisor, independent, I should say he
Speaker 3: joins us from Northbrook, Illinois. Max, Good to have you
Speaker 3: here with us. We kind of, you know, just like
Speaker 3: the FED, seem to be data dependent in terms of
Speaker 3: the sentiment and the moves in the market environment.
Speaker 2: How do you see this trade?
Speaker 3: Are there any clear trends that are emerging in your view?
Speaker 3: Or it's going to be a bit of a weight
Speaker 3: and see mode because of what we get from the
Speaker 3: new administration, what we get from economic data, and what
Speaker 3: that will mean in terms of FED policy.
Speaker 11: Well, thank you for having me on. And I think
Speaker 11: it's a combination of both. But I think what we've
Speaker 11: seen is a FED that is recognizing that inflation's a
Speaker 11: little bit stickier than they thought, and that you have
Speaker 11: growth roughly around GDP roughly around three percent yet core
Speaker 11: CPI roughly about three percent. And it really is hard
Speaker 11: to justify in our opinion, why they cut so aggressively
Speaker 11: last year at fifty bases points and then followed up
Speaker 11: by another two twenty five. If you have nominal GDP
Speaker 11: around five and a half six percent, we don't think
Speaker 11: it warned to cut. So what you're going to see
Speaker 11: now is we think pressure pressure from the new administration.
Speaker 11: New administration's talking about tariffs, talking about a potential embargoes
Speaker 11: and restrictions, so we think that's going to be a
Speaker 11: little inflationary. Also, if you think about immigration policies, so
Speaker 11: we think that a ten year treasury around four fifty
Speaker 11: four sixty, that's great, but we see more pressure pushing
Speaker 11: it upward as deficits start to rise. Also, the current
Speaker 11: administration that's coming in, they're talking about cutting taxes even more.
Speaker 11: I mean, let's not forget they were trying to get
Speaker 11: rid of Social Security tax, taxes on tips. So we
Speaker 11: see a lot of spending taking place and you may
Speaker 11: not see the tax cuts or their spending cuts that
Speaker 11: they're being promised. I mean, already I think Elon musk
Speaker 11: is saying two trillion was a little aggressive, maybe more
Speaker 11: towards a trillion. And we thing as time goes on,
Speaker 11: there's more risk to the upside and interest rates than
Speaker 11: there is downside.
Speaker 4: In our opinion, what brings rates down ultimately or is
Speaker 4: this the new normal at least based on what happens
Speaker 4: fiscally over the next few years.
Speaker 11: I think a slow down in the economy I think
Speaker 11: if you see the demand significantly slow down, but keep
Speaker 11: in mind, there's going to be pressure to refinance. There's
Speaker 11: a lot of debt that's coming to do. You're dealing
Speaker 11: with about one point two trillion annually and debt service costs,
Speaker 11: so and a lot of paper is going to be
Speaker 11: rolling over. So that's going to eat up on some
Speaker 11: of the federal budget and spending. But I think the
Speaker 11: only way you really see interest rates coming down is
Speaker 11: if you see the economy substantially coming down, right and
Speaker 11: unemployment ticking up. But again, if you're talking about immigration
Speaker 11: right reform, you're talking about shutting the borders and deporting
Speaker 11: a lot. That's a lot of labor that's going to
Speaker 11: be leaving the economy, and that means inflation, we think,
Speaker 11: to wages. So we think right now you could actually
Speaker 11: see the ten year go up to five to five
Speaker 11: and a quarter. And we don't think this market is
Speaker 11: really pricing in that scenario, and we're not saying that
Speaker 11: it's going to definitely go there. We think there's a
Speaker 11: high probability if the current president's coming in gets what
Speaker 11: he wants. We just don't see how that brings interest
Speaker 11: rates down in the next six to twelve months.
Speaker 3: Right, but higher rates in terms of certainly some of
Speaker 3: those hier are big tech names that have had quite
Speaker 3: a run up, you know, or their valuations. Right, You've
Speaker 3: got to do somewhat of a reset. Having said that,
Speaker 3: you do still like Microsoft. Do you like Qualcom at
Speaker 3: current prices? Is it just a price thing or is
Speaker 3: it a fundamental thing. Let's start with Microsoft.
Speaker 11: Sure, I think it's a fundamental thing basically. I mean
Speaker 11: they're monetizing with the check BTC. They're monetizing their business,
Speaker 11: and the prices come down, right, And even though it's
Speaker 11: a software company, right, they tend to get higher multiples
Speaker 11: let's say a hardware company. So I like where they're positioned.
Speaker 11: They're spending a lot of money. I mean, we want
Speaker 11: it's one of our largest positions. We wouldn't be jumping
Speaker 11: in full boat at this point. We look for any
Speaker 11: further pullbacks. But you could start in our pinion, you
Speaker 11: can start a position here. But realizing these are not
Speaker 11: cheap Qualcomm, you know, we think is a little bit
Speaker 11: different story train at fifteen times earnings, and we think
Speaker 11: as they expand into the Internet of things, as they
Speaker 11: start expanding into the PC market that could be a
Speaker 11: new growth potential for them. They're only trading at fifteen multiples,
Speaker 11: and you know, it's been more of a depressed multiple
Speaker 11: in that stock, and the stock was trained at a
Speaker 11: much higher rate. So we think here, along with even
Speaker 11: Google and all three of these companies, we have investments
Speaker 11: that we think they have a better upside potential. But
Speaker 11: the nasdick in general, chading it thirty seven times right
Speaker 11: after two big years, is not and it's really become
Speaker 11: an interest rate sensitive play if you think about it.
Speaker 11: Every time interest rates take up, they come down. So
Speaker 11: at this point, I think everybody recognizes the growth and
Speaker 11: they're paying for it. So we think there's very limited
Speaker 11: upside in the Nasdaq this year, but we think there's
Speaker 11: a lot of upside in the other parts of the market.
Speaker 3: Well, let's talk about another part at Jacks, actually a
Speaker 3: part that we talked about, the defense part. We talked
Speaker 3: earlier about Aerial Industries selecting Ohio. They're going to create
Speaker 3: this sprawling new manufacturing facility that's going to make a
Speaker 3: lot of autonomous systems and weapons, and they're going to
Speaker 3: be doing that on an annual basis. But you like
Speaker 3: some of the kind of old line defense guys, and.
Speaker 4: Those are the ones that Androl wants to disrupt exactly.
Speaker 3: So well, lackeyed Martin or General Dynamics, why those two
Speaker 3: versus someone else.
Speaker 11: Well, again, we're divoting investors, so we like dividing growth.
Speaker 11: And both of them have dividends roughly around two and
Speaker 11: two and a half percent percent respectively. If you look
Speaker 11: at General Dynamics, twenty percent of their business is a
Speaker 11: golf string and they're bringing on more onlines with the
Speaker 11: G seven hundreds, and we see that side of the
Speaker 11: business really going up. Also, we think the demand for
Speaker 11: the products. I mean, you're going to need the submarines,
Speaker 11: you're going to need the strikers, you're going to need.
Speaker 8: On the tank.
Speaker 11: So we think the demand is not going away. As
Speaker 11: we do not see global disruption calming down that much. Right,
Speaker 11: we see it in the Middle East calming down, but
Speaker 11: you still have to do with the Ukraine, you still
Speaker 11: have to do with Asia and Europe. So we think
Speaker 11: demand and we think Lockey, who's building the planes. I mean,
Speaker 11: we have to look at the fighters, and if you
Speaker 11: look at it, there's going to be disruptors. But we
Speaker 11: like safety and these two are behemoths, right, and so
Speaker 11: if you have that dividend growth and we have the
Speaker 11: budgets that are put in there, we feel very comfortable.
Speaker 11: Especially they've come down about ten percent, so we like them.
Speaker 4: Here, Okay, we got thirty seconds left for you to
Speaker 4: talk about energy infrastructure Williams Companies thirty seconds.
Speaker 6: Why are you optimistic?
Speaker 11: We I'm optimistic on the pipelines. They're not cheap right now.
Speaker 11: Both that and one hope we have an investment. They've
Speaker 11: gone up like fifty percent last year, but they service
Speaker 11: the natural gas like thirty percent of the US so
Speaker 11: and there hasn't been any buildouts in the pipelines. And
Speaker 11: if you're going to become more energy independent and more production,
Speaker 11: you've got to move that gas throughout the country and
Speaker 11: they have that market. So we like them a lot,
Speaker 11: paying a nice dividend about three and a half percent.
Speaker 11: One Oak is closer to four percent, and they've just
Speaker 11: had an acquisition of Magiality. So we like the pipeline
Speaker 11: because you have to move energy throughout the country and
Speaker 11: there's no new pipelines in this country.
Speaker 2: All right, Max, thanks so much, love talking stocks with you.
Speaker 3: Max Wasserman founder and senior portfolio manager at Nearmark Capital.
Speaker 3: Joining us from Northbrook, Illinois.
Speaker 8: This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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